Unit 3: Chapter 7 Posting

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• Unit 3 Chapter 7 Posting
• I will take up the answers for Unit 2 Test today
  after the lesson.
• Youtube clip General Journal and Ledgers by
  MattFishe for people who want to listen to the
  lesson one more time.
• Chapter 7 Quiz on next Tuesday Nov 3

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The Accounting Cycle (not all the steps are
mentioned here)
Transactions occur.
Entries recorded in journal.
Posting from the journal to the ledger accounts.
Ledger balance by means of trial balance.
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Posting

• There are two important books in accounting
  General Journal and Ledger.
• The General Journal is an ongoing record of all
  business transactions. It is like diary or
  journal.
• For each account (e.g. Bank, Accounts Receivable,
  Drawings) there is also an ongoing record ? a
  ledger.
• The process of transferring the numbers from the
  General Journal to the ledger is called POSTING.

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Balance Column Account

• So far, we considered only T account for Ledger.
  
• However, there is a second kind of Ledger called
  Balance Column Account, which has three
  columns (similar to T account)
• Debit column
• Credit column
• Balance column (running balance)
• BCA shows the account balance after each entry.

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The Balance Column Account
Bank
5 000
350
1 750
700
200
960
450
6 350
3 060
3 290
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Balance Column Account

• P.R. Posting Reference number, and this
  indicates the page number of your journal
• Dr/Cr indicates whether the balance is debit
  balance or credit balance.
• No 101 indicates the account number of Bank
  account.

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Note about previous slide

• After the posting has been completed, the P.R. in
  the General Journal should be the Ledger account
  number.
• Cross referencing -- the ledger references
  the journal and visa versa. These are the two
  reasons why we insert P.R. in both GL and BCA
• Good for tracing (or auditing) entries between
  the journal and the ledger
• Helps you to know what has been posted

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Six Steps in Posting

• 5 Steps in the Ledger (Balance Column Account)
• Turn to page, which contains the particular
  account in ledger.
• Record the date on the next line.
• Record the journal page number in PR column.
• Record the amount in Debit or Credit column.
• Calculate and enter new account balance and note
  whether its a DR or CR balance.

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Six Steps in Posting

• Last step in the Journal
• 6. Record the ledgers account number in the
  journal.
• By doing step 6, you are checking off to show
  that the journal entry has been posted.
• This action is important when finding errors
  after making trial balance.

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Classwork / Homework

• Review Questions 1 to 4 and 6 to 9 (P233)
• Exercises 1 and 2 (P233)